Sri Chakra Merchandising (P) Ltd., CHENNAI V. DCIT, CHENNAI

ITA 459/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5578 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 02-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.459/MDS/2016 ' (' / ASSESSMENT YEAR : 2008-09 M/S SRI CHAKRA MERCHANDISING (P) LTD., NO.723, GNT ROAD, KOTTAKARAI, GUMMUDI POONDI, CHENNAI 601 201. PAN : AAJCS 3451 C V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI G. BASKAR, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 0 . 1$ / DATE OF HEARING : 20.12.2017 2!( . 1$ / DATE OF PRONOUNCEMENT : 28.12.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 15, CHEN NAI, DATED 17.03.2015 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2 I.T.A. NO.459/MDS/16 2. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THREE ISSUES ARISE FOR CONSIDERATION IN THIS A PPEAL. THE FIRST ISSUE IS WITH REGARD TO LOSS RETURNED BY THE ASSESS EE TO THE EXTENT OF 25,57,57,954/-. THE SECOND ISSUE IS WITH REGARD TO ADDITION OF 7,68,35,802/- ON CLOSING STOCK. THE THIRD ISSUE IS WITH REGARD TO ADDITION OF 13 CRORES ON ACCOUNT OF ADDITIONAL SHARE CAPITAL. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE CIT(APPEALS) HAS ENHANCED THE ASSESSED INCOME FROM 8,11,24,410/- TO 12,95,18,768/- WITHOUT GIVING ANY NOTICE FOR ENHANCEMENT. ON FILING ADDITIONAL EVIDENCE, THE LD .COUNSEL SUBMITTED THAT THESE DOCUMENTS COULD NOT BE PRODUCE D BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT. ACCOR DING TO THE LD. COUNSEL, PROPER OPPORTUNITY WAS NOT GIVEN TO THE AS SESSEE BY THE ASSESSING OFFICER. MOREOVER, THE CIT(APPEALS) WITH OUT GIVING ANY OPPORTUNITY BY WAY OF A STATUTORY NOTICE, ENHANCED THE ASSESSMENT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THERE IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, HENCE, THE MATTER MA Y BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDER ATION. 4. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, VERY FAIRLY SUBMITTED THAT SINCE THE 3 I.T.A. NO.459/MDS/16 ASSESSEE HAS FILED ADDITIONAL EVIDENCE BEFORE THIS TRIBUNAL, THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFF ICER, THEREFORE, HE MAY NOT HAVE ANY OBJECTION IN CASE THE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LD.COUNSEL FOR THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE AN D PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THE CIT(APPEALS) ENHANCED THE ASSESSED INCOME TO 12,95,18,768/- FROM 8,11,24,410/- WITHOUT ISSUING ANY NOTICE FOR ENHANC EMENT. UNDER THE SCHEME OF INCOME-TAX ACT, THE POWER OF TH E CIT(APPEALS) IS COTERMINOUS WITH THAT OF THE ASSESSING OFFICER. APART FROM THAT, THE CIT(APPEALS) IS ALSO EMPOWERED TO ENHANCE THE A SSESSMENT. HOWEVER, THE CIT(APPEALS) IS EXPECTED TO GIVE NOTIC E OF ENHANCEMENT BEFORE DOING SO. IN THIS CASE, THE CIT (APPEALS) ENHANCED THE ASSESSMENT WITHOUT GIVING NOTICE, THER EFORE, THERE IS A CLEAR VIOLATION OF NATURAL JUSTICE AS CONTENDED BY THE LD.COUNSEL FOR THE ASSESSEE. 6. MOREOVER, THE ASSESSEE HAS ALSO FILED ADDITIONAL EVIDENCE BEFORE THIS TRIBUNAL. THESE DOCUMENTS HAVE TO BE V ERIFIED BY THE LOWER AUTHORITIES. THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT THE 4 I.T.A. NO.459/MDS/16 ASSESSING OFFICER BEING THE ORIGINAL AUTHORITY, MAY BE IN A BETTER POSITION TO APPRECIATE THE ADDITIONAL EVIDENCE FILE D BY THE ASSESSEE. THEREFORE, THE MATTER NEEDS TO BE RE-EXAMINED BY TH E ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHO RITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE RAISED BY THE ASSESSEE I S REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL RE- EXAMINE THE MATTER IN THE LIGHT OF THE ADDITIONAL E VIDENCE FILED BY THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH DECEMBER, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 28 TH DECEMBER, 2017. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-15, CHENNAI-34 4. CIT-6, CHENNAI-34 5. 69 ,1 /DR 6. :' ; /GF.